The Employment Creation Potentials of Small Scale Business in Nigeria

The Employment Creation Potentials of Small Scale Business in Nigeria (A Case study of Anambra State)

Employment Creation  – The definition of small scale business to differs with countries and individuals. However there is no universally or generally accepted definition of small scale industry. In Nigeria there is no converses as to what the definition of small scale business is, for instance. The Nigeria bank for commece and industries (NBCI) adopted a definition for the period (1985 – 1990) in which it defined small scale industry as “an industry with capital not exceeding N750,000 including working capital but exchanging cost of land”.

Also according to the federal ministry of commerce and industry defined small scale industry as:

“Any establishment with capital investment totaling N250,000.00 and employees”.

These, among others are the various definition given to small scale business in Nigeria. This implies that actually we do not have a definite definition on small scale both in academic circle and among practitioners.

It should be mentioned that state government adopt definitions which are not only different from that used by the federal government but also different among local and state government. Based on this definition, we found out that there are a wide range of small businesses enterprises in Aniocha Local Government Area of Anambra State among which are faring, supermarkets, bakes, medical clinics, restaurants, furniture companies, block industries, service stations, retailers in the market trashcan operators, patent medicine dealers, building contractors professional hunters and numerous others.

2.1     ROLE OF BUSINESS IN SOCIETY

There are a few things a developing country or society needs as much as good business organization. Business can be seen as an economic activity undertaken to produce both goods and service which is profit- oriented (Robock Sumonds and Scrik 1977). Because of the impact of public issues, the business institution insolvent major charges in the recent time. An additional set of responsibilities called “social responsibilities” were added to its traditional economic responsibilities. These days, the corporation is no longer seen as a single purpose economic institution devoted solely to developing and marketing product and service. By virtue of its size resources and impact in the society the corporation has also become deeply involved in the accomplishment of a number of social tasks. As a result of this, today’s business enterprises are critically affected by such matters as consumer and environmental protection, occupational wealth and safety, full financial disclosure, the political process at all level and the quality of life in the communities in which they are located.

In Nigeria today, good business outlay helps to increase the total outputs of commodities, increases investment, it creates chances of employment etc, therefore business is a necessity ot the economy of any society.        

2.2     THE IMPORTANCE OF EMPLOYMENT TO NATIONAL ECONOMIC WELL BEING:

Employment is a situation when the members of the labour force are dutifully engaged in the production of goods and services employment is closely related to the population size of any given economy (optimum population refers to a situation when the size of the working population combines with other available resources to produce he maximum output per head.

At least two characteristics reflects a nation with high employment rate.

• They have good industrial structure
• Good income distribution which attracts foreign investors.

Employment plays a major role in the national economic well being in the sense that it helps to improve economic growth, in flow of foreign currency export of finished products, introduction of raw skills, competition and efficiency, rapid industrialization and reduction of social ills. If may jointing of youths in Nigeria are duly employed there will be a drop in crime rate and a remarkable increase in the total output of commodities.

In conclusion, studies helps develop institutions that reduces the extreme of income in the economy. The resulting of these will be a large and comfortable middle class confronted with a wide array of branded products, who can be able to own automobiles and major appliances as well as enjoy leisure and take vacations.

2.3     THE CLASSIFICATION OF EMPLOYMENT INTO SELF EMPLOYMENT AND PAID EMPLOYMENT

Self employment is the commonest from of employment or ownership of business. In this category of business, it is usually owned and by one person (ie sole proprietorship).

This kind of business has distinct characteristics:

• It is the easiest form of business, once the owner begins it, it becomes its own automatically.
• The profit realized become virtually his own, which means he do not share it with anyone.

• One man business has no special legal restrictions. Only those general areas of civil and criminal law that apply to all forms of business ownership apply to the sole proprietor.

But in paid employment, one have to enter “contract of employment” with another in order to render services for him. Under work mans compensation Act 1973 section 90, as amended the employee and employer has equal footing in the bargaining of contract of service.

Under paid employment some features exist:

• There is master (employer) and servant (employee) relationship.
• The employee is bound by law to render service to the employer.
• The employer in return under industrial law, to provide work, hence the employee is ready and willing to work.
• The employer has the right to give and terminate employment. Without reasons, although the employee should be given three (3) months to sell redress in law contract.

The employer should indemnify the employee, provide job securities and incentives to the employee etc.

2.4     SMALL SCALE BUSINESS AS A SOURCE OF SELF EMPLOYMENT AND PAID EMPLOYMENT

This history of small scale business has been with man for ages. The fact that individuals do not posses the resources for a bigger enterprise has resulted in small businesses flourishing in every economy. It’s scope and native have also been broaden ranging from the petty trading in the streets to the large proportion of private limited companies that are usually described as family business. They have also dominated the ensure spectrum of commercial activity and collectively, they employ more workers than the public sector.

When a small scale business opened its door for business, it is usually managed and owned by one person which makes for its self employed. A key incentive to this entrepreneur is that being his own boss, he is working for himself, thus the profit derived from the business operations saves as his financial reward.

But when investment increases, market opportunities widens, and variety of products are introduced. This self employed business man sees the need to employ people. He enters into the labour market (ie the area in which exchange of labour takes place) to seek for employees who are aloowed by law to work or offer themselves for work. He negotiates wages with them in line with the government maximum wage. This has shown that at the long run small scale business is a source of self employment likewise paid employment.

2.5     ANIOCHA LOCAL GOVERNMENT AREA AND EMPLOYMENT IN NIGERIA

A wealth of literature exists on the problems facing small scale business in Nigeria as well as employment opportunities created by the small scale business which has resulted to their failures.

In Nigeria, it is a common belief that anybody can manage a business but expense reveals that in Aniocha local government Area the possibility joining a small scale business is not basically the problem but managing it and creating employment opportunity. The man problem facing them is lack of adequate human labour planning this have ruined many small firms in Aniocha leading to mass un-employment. Another problem is the manner in which workers are employed, the issue of favourism that is (God father) is the order of the day, thereby substituting mediocrity for merit, creating an undue advantage over other workers which brings commotion in the business – lack of job security and motivation in Aniocha Local Government Area affects workers, hence they are not sure of their slay in the organization.

The researcher believes that if all these problems are addressed, it will go along way to improve the functioning of small scale business in Aniocha and employment in Nigeria, in general.

This article was extracted from a Project Research Work Topic

“THE EMPLOYMENT CREATION POTENTIALS OF SMALL SCALE BUSINESS IN ANOCHA LOCAL GOVERNMENT AREA, ANAMBRA STATE ”

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